Lots of landlords in Orlando and around Central Florida ask the same question: How much rent should I charge? Fair market rent (FMR) is determined by the rent collected for comparable properties in the area. Properties of similar size, bedrooms, baths, amenities, etc., should rent for about the same price in a given neighborhood. Rent could possibly be higher for extra amenities such as a pool, spa, or non-neighborhood standard upgrades.
So how do you determine FMR? Find properties similar to the property in question that have been rented recently or are currently for rent and compare. Check the obvious sources, such as Craigslist, Zillow, and other publications and advertising sources on line and in print, such as local papers and news magazines. Call properties displaying For Rent by Owner signs. Also, contact real estate agents who work the area and see what they think homes in the area are renting for.
Next, start building a reference file or database on the properties with their rent, location, bedrooms, bathrooms, square footage, and other criteria that you believe is applicable. Specific details (square footage, bedrooms, etc.), of the homes can be found by doing a search online in the local property appraiser’s website if they are not all available in the ad. It is also helpful to know how long properties that are currently for rent have been listed. If a property has been on the rental market for 3 months at a certain price, there is a very good chance that the property is overpriced.
Now that you have collected some data, a little analysis is in order. Calculate the price per square foot and see how the properties compare. Make sure to adjust for extras (in Florida, a home with a pool will often rent for more than a home without) so you don’t over or under-charge. You can also look up the HUD Section 8 values for your area at http://www.huduser.org/portal/datasets/fmr.html for general comparison as well. All these sources will give you a better idea of how much you should be able to charge.
Lastly, decide whether you want to rent the property as quickly as possible or if you want to get the absolute most for the property even if it means having it sit on the market for a while. Price accordingly.
If you know anyone interested in building a fair market rental database, please contact Central Florida Property Management at 407-429-4834!